Mar 14, 2025

Consolidation, shifting valuations and a limited supply of quality companies for sale are driving increased activity March 14, 2025, 4:47 pmBy Jonathan Delozier The title insurance industry continues to seek a “new normal” when it comes to transaction volume, as well as mergers and acquisitions (M&A). High company valuations and a multitude of deals during the peak post-pandemic market have now been replaced with a mixed status quo. HousingWire spoke with two experts — Howard Turk, founder and managing partner of Turk & Co., an investment banking firm specializing in the sector; and Michael Rubin, president of Shaddock National Holdings — for their takes on the current climate. Market consolidation, shifting valuation trends and a limited supply of quality companies for sale are driving increased activity, the pair said. Many owners are weighing whether to sell now or hold out for the next industry growth cycle. “We’ve never been as busy as we are now,” Turk said. “It’s a seller’s market, but there aren’t many good companies available. We’re not likely to see those high valuations again anytime soon. Many owners are waiting for the next upswing, but the question is whether they can hold out long enough.” Turk said his company’s 2024 transaction volume was 50% higher than in 2023. He sees that trend continuing this year. Recent dealmaking Rubin and Shaddock National Holdings have made four title insurance acquisitions over the past year. In 2023, a subsidiary, Capital Title of Texas, bought the Texas and Midwest retail title operations of Doma Holdings Inc. And the remainder of Doma’s operations were acquired by Title Resources Group this past September. “The activity and chatter around M&A has started to pick up more,” Rubin said. “I’m looking at multiple deals right now for probably the first time in a while. The economy has been really bumping along the bottom, where conditions aren’t stable but not significantly improving either. “This has prompted business owners contemplating retirement or exit strategies to reconsider waiting for a market upswing, leading them to explore current valuation opportunities.” Other notable title insurance industry deals in 2024 included the acquisition of Alliant National Title Insurance Co. by Florida-based builder Dream Finders Homes. Fidelity National Financial acquired North Carolina-based Metro Title, which had provided commercial and residential services in that area for almost two decades. This past December, Compass revealed plans to acquire Christie’s International Real Estate and @properties, a deal that also included Chicago-based Proper Title. And in January 2025, title production platform provider Qualia announced its acquisition of RamQuest and E-Closing from Old Republic National Title Insurance Co., which had previously served as competitors to Qualia. Market trends and consolidation Turk said his firm evaluates title companies based on three factors. These include an earnings multiple; the specific time frame the multiple is applied to (trailing 12 months, a three-year blend or projections); and the terms of the deal, such as cash down payments versus earnouts. He pointed to inflated valuations in 2021 and early 2022 when transaction volumes were high. These have since come down as companies adjust to the reality of a cooling housing market . “The valuation challenge is particularly pressing because buyers are cautious about acquiring companies whose recent performance isn’t sustainable,” he said. “No one’s going to pay you based on one strong quarter You need a clear, consistent trend over six to eight quarters to justify a higher valuation.” Shaddock National Holdings has concentrated on smaller, localized acquisitions that primarily target single-owner operations. “The other deals that we’ve done have been entirely single-owner transactions, private ownership groups, and that tends to be our bread and butter,” Rubin said. “A notable exception is the acquisition of Doma’s Texas operations, which was owned by a public company. I would be shocked if, over the next couple of years, we don’t acquire in a new major metro with something of size.” Private equity has become a significant player in the title insurance sector, he added. “You also have private equity money coming into our business like it has never really come in before,” Rubin said. “This is part of a broader trend where private equity firms are looking to integrate title insurance into their real estate portfolios, aiming to capitalize on synergies and revenue streams. “I never thought the returns would be exciting enough in the title business. I don’t know if there’s buyer’s remorse there or not at this stage.” Turk also highlighted a shift in sales roles within the industry. “Classic sales roles — where people just do sales — are diminishing,” he said. “Instead, we’re seeing the rise of sales-driven technicians and a companywide culture of sales rather than dedicated sales teams.” Rubin expects continued consolidation in the title insurance industry over the next two to three years — possibly involving significant companies. “I can see major underwriters reentering the merger and acquisition space through innovative holding structures, leading to the acquisition of large agencies in various states,” he said. “This trend is expected to persist, especially as the market shows signs of improvement.” The title insurance industry generated $4.3 billion in premiums in the third quarter of 2024, according to the American Land Title Association (ALTA), up 5.3% year over year. Five major underwriters hold a 74% industry market share, according to the most recent ALTA data. These companies include First American Title Insurance Co., Old Republic, Fidelity and its subsidiary Chicago Title Insurance Co., and Stewart Title Guaranty Co. Advising buyers and sellers For industry colleagues contemplating M&A deals, Rubin emphasized the importance of aligning with compatible partners. “Follow your gut,” he said. “Do you want to work with the people that you are going to be acquiring potentially? Also remember to not overextend yourself financially. Actual costs often exceed initial estimates. “Don’t overextend just to get a deal done. You may find yourself out over your skis, and lending to a title institution to get more capital is a very difficult thing at this time.” Turk’s firm advises companies to optimize operations before a sale. This ensures they meet key financial benchmarks, maintain diversified revenue streams and avoid corporate concentration issues. “The same metrics that applied pre-COVID still apply today,” Turk said. “Companies need strong margins, efficient workflows and compliance with industry regulations to maximize their value. We’ve extended our title advisory team and we’re spending a lot more time meeting with companies by going in there and saying, ‘Look, your splits are not at market. Your work wells aren’t as efficient as they should be. You have too many employees. '” While Shaddock National Holdings manages M&A processes internally, it utilizes external resources for specific aspects. “What we’ll do is, we’ll run the process in-house. I’ll quarterback the transaction,” Rubin said. “The company engages outside counsel for most transactions and outsources certain due-diligence tasks, especially for larger deals requiring specialized expertise.” Market and regulatory outlook Sweeping government cuts and changes enacted by the new Trump administration have put the Consumer Financial Protection Bureau (CFPB) in the crosshairs for drastic reform or even dismantlement. But Turk cautions that the existence of regulations remains independent of agency changes. “There’s a misconception that if the CFPB is weakened, regulations like RESPA (Real Estate Settlement Procedures Act) will go away,” he said. “The laws themselves remain in place, even if enforcement shifts. How these will be enforced will remain a question for the time being, but they’re not going away.” Rubin said the industry has made it through the trough of the current housing market downturn. But he also thinks that a “new normal” may also be getting cemented, which could spur more M&A exploration and activity. “That person may have said, ‘You know what? I’m going to hold off to a better economic market.’ Now there’s a realization of, ‘I don’t know if I’ll make it to the next economic high, so maybe I should just find out what it’s worth today.’” Turk illustrated current industry dynamics with a well-known business parable. A longtime barber, charging $7 per haircut, saw a competitor open across the street that advertised $5 haircuts. Initially, he lost business, but then he put up a sign that read, “We fix $5 haircuts.” “That’s exactly what’s happening with joint ventures in the title industry,” Turk explained. “Everyone is jumping into them but not all are set up compliantly. There’s going to be a need to ‘fix’ poorly structured joint ventures in the coming years.” Related